The diplomatic crisis over Chinese dissident Chen Guangcheng appeared headed for a resolution Friday after China's foreign ministry suggested Mr. Chen would be allowed to study abroad.

Allowing Mr. Chen to go to the United States on a study visa seems a graceful way out of a saga that still has the potential to badly damage relations between the world's two superpowers.

U.S. Secretary of State Hillary Clinton told reporters in Beijing that "progress has been made" in helping Mr. Chen determine his future, after days of negotiations over the activist who fled for six days into the U.S. embassy in Beijing after escaping house arrest.

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"We have been very clear and committed to honouring his choices and our values," Ms. Clinton said of Mr. Chen, who is now in a Beijing hospital and has said he wants to spend time in the United States. "We will continue engaging with the Chinese government on these (human rights) issues at the highest level, putting these concerns at the height of our diplomacy."

Mr. Chen was at one point demanding political asylum in the U.S., a move that would have been embarrassing to the Chinese government, which claims to be improving its human-rights record. Meanwhile, leaving the blind lawyer behind in China – where he has already endured almost seven years of persecution because of his political activism – had become an increasingly difficult option for the Obama Administration, particularly with Republican presidential candidate Mitt Romney harshly criticizing the U.S.-brokered deal that convinced Mr. Chen to leave the U.S. Embassy in Beijing.

"There are press reports that he wants to study abroad. If it is so, he can apply via the relevant laws and authorities," foreign ministry spokesman Liu Weimin told a press conference in Beijing. "I'm sure the relevant Chinese authorities will handle his application according to the law."

The outlines of a deal emerged as Ms. Clinton prepared to depart Beijing at the end of the biannual U.S.-China Strategic and Economic Dialogue, a mini-summit that has seen its agenda sidelined by the drama over Mr. Chen's fate.

The two sides, of course, have reached a deal once before this week, one that saw Mr. Chen agree to leave the U.S. Embassy after a six-day stay in return for a guarantee that he would be reunited with his family and allowed to study at a Chinese university without harassment. But briefly after leaving the safety of the diplomatic territory, Mr. Chen said he no longer felt safe, and said he wanted to go to the United States with his family.

But in an interview with The Globe and Mail early Friday morning, Beijing time, Mr. Chen said his worries had eased following a meeting with officials from China's central government who came to the hospital where he is being treated, as well as phone conversations with American diplomats. He said he still hoped to leave China in order to rest and receive medical treatment, but no longer wanted formal asylum. If he does leave, he said he would do so with the intention of returning to China.

"I want to rest for some time and recover my health," he said, speaking via a mobile phone that can receive calls but he says does not work when he tries to dial out. "Coming in and out [of China]is a very natural thing. Unless they can't guarantee my rights as a citizen."

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Most significantly, he said there were signs that the Chinese side intended to honour the agreement under which he agreed to leave the refuge of the U.S. Embassy on Wednesday. That deal, which the U.S. side promised to monitor, was to allow Mr. Chen to live freely with his family and pursue studies in another part of China while an investigation was launched into those who held Mr. Chen and his wife and daughter incommunicado for the past 20 months inside their home in Shandong. That ordeal was seen as extralegal punishment for Mr. Chen's political activism.

"[The official who visited said]they were authorized by the central government to talk to me about my situation. I told them what happened to me in Shandong. The official said to me 'if the law was violated, we will investigate and punish [the offenders]' This is what we talked about. As regards to what really will happen, we need to wait and see what they do," he said. "This is a good start. It's based on the agreement between China and America. This is why I said this agreement done by Ms. Hillary is unprecedented. Do you understand? If they really obey Chinese law and regulations and start a thorough investigation on this issue, I think this is a very positive thing."

An investigation into his treatment in Shandong was a key demand made by Mr. Chen in a YouTube video that he posted last week, one in which he addressed Premier Wen Jiabao by name and asked for his personal intervention in the case.

The new, more conciliatory, tone is the latest position from Mr. Chen, who has at times seemed bewildered by events. It's one that may be calibrated to allow all sides to save face, since going to the U.S. to receive medical care is less offensive in the eyes of the Communist Party leadership claiming asylum from political persecution.

The 40-year-old self-taught lawyer said he was alone Thursday night in his hospital room with his wife and two children, a rare reunion for the family, which had been forcibly split up by police – Mr. Chen's son was taken away and forced to live with relatives in another part of China – as part of the campaign against Mr. Chen.

Mr. Chen initially drew the wrath of local authorities in Shandong for exposing endemic human rights violations there, including forced abortions and the sterilization of women who had violated the country's one-child policy.

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Mr. Chen said he still had worries about his security, particularly if he returned to Shandong, where he said his former captors had taken over his house and installed seven video cameras inside. He said he was worried for the safety of his 80-year-old mother, who was still in his hometown of Dongshigu.

During the interview, Mr. Chen also rescinded some of his stinging criticisms he had leveled this week against U.S. Embassy personnel, whom he told reporters abandoned him at the hospital on Wednesday night. He said he has since learned that the diplomats intended to stay by his side, but were forced by Chinese security officers to leave the hospital while Mr. Chen was out of the room receiving an examination.

Mr. Chen says he fractured his foot during his harrowing escape from Shandong – "every step was difficult" – and that he also has some other longstanding medical issues that went untreated during four years in prison (he was convicted of "organizing a mob to disturb traffic") and the subsequent detention in his home.

Mr. Chen said his wife, Yuan Weijing, had been beaten by their captors in Shandong and also needed medical treatment.

Mr. Chen said that he spoke to U.S. diplomats by phone on Thursday but they had been prevented by police from visiting him. Uniformed and plainclothes police were stationed inside and outside Chaoyang Hospital on Thursday, keeping close watch on a crowd of foreign media who gathered outside.

The drama began April 22 when the Mr. Chen decided to flee his captors in Shandong. He deceived his guards into believing he was ill, then slipped out during the night to meet a friend who was waiting in her car at a prearranged meeting point. They drove 500 kilometres to Beijing and the U.S. Embassy. "I went to the American Embassy because democracy, freedom and human rights are the pillars of the country," he explained.

While he was initially pleased with the deal he reached six days later, he made the decision to leave the embassy without being allowed to call his friends and fellow dissidents. Once he was out, they convinced him that he had put himself in danger by leaving the embassy, and told him he should request asylum.

The saga has been set against the backdrop of the U.S.-China Strategic and Economic Dialogue, a biannual summit attended by both Ms. Clinton and Chinese President Hu Jintao that has coincidentally been taking place in Beijing this week and which ends Friday. Mr. Chen's case quickly pushed the important economic talks about trade imbalances and the valuation of China's currency to the sideburner in negotiations.

Mr. Chen's case has also become part of the U.S. presidential race. Leading Republican contender Mitt Romney said Thursday that the U.S. Embassy's decision to let Mr. Chen leave into an uncertain situation was "a dark day for freedom" and a "day of shame" for the administration of President Barack Obama.

In the interview, Mr. Chen said that he wanted to publicly thank Mr. Obama and Ms. Clinton. "I hope they will continue working for human rights and continue providing help to me. I still need their help." He credited Ms. Clinton with negotiating the "unprecedented" deal that convinced him to leave the embassy.

The saga to date has also been influenced by the shifting political ground in China. Mr. Chen thrust himself into the international spotlight at a time when the ruling Communist Party is publicly divided ahead of a highly sensitive power transfer – during which seven of the nine members of the all-powerful Standing Committee of the Politburo are expected to retire to make way for a new generation of leaders – this fall.

One faction, of whom Mr. Wen, the premier, is the most prominent, believes China desperately needs a more open political system, one in which activists like Mr. Chen would conceivably have more freedom to speak and promote their causes. The other, which is linked to the security services that detained and threatened Mr. Chen, believes tight control is necessary to maintain Communist Party rule.

Mark MacKinnon is currently based in London, where he is The Globe and Mail's Senior International Correspondent. In that posting he has reported on the Syrian refugee crisis, the rise of Islamic State, the war in eastern Ukraine and Scotland's independence referendum.Mark recently spent five years as the newspaper's Beijing correspondent. More

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